Cal-COBRA - Information for Small Companies

How do the recent 2009 ARRA Stimulus Package COBRA changes affect small businesses?

If you have 2 to 19 employees and your business is in the State of California, your employees would be eligible for Cal-COBRA. Federal COBRA is for companies with 20 or more employees.

What is Cal-COBRA?

Cal-COBRA is a California health coverage protection. It is not health coverage. Cal-COBRA requires employers with 2 to 19 employees to provide their employees (and their dependants) the right to continue health insurance coverage after a qualifying event occurs, such as being laid off, quitting, having hours reduced. It lets employees keep their insurance for up to a total of 36 months.

Cal-COBRA is also for people who use up their Federal COBRA. When the 18 months of Federal COBRA ends, employees can buy 18 more months of health insurance under Cal-COBRA.

Employers:

As an employer, upon completing your insurance provider's Employer Group Reporting Form notifying of an employee change in health insurance benefits, a Cal-COBRA Qualifying Event Notice form will need to be completed. Employers have 30 days to complete this form upon the termination or reduction of hours of the employee.

Employees:

Employees have 60 days after being notified of your Federal COBRA/Cal-COBRA rights to sign up. If you do not receive notification in the mail, call your last employer or health plan.

A reduction in premium may also be available to people eligible for Cal-COBRA under the ARRA. Eligible individuals may be able to change to less costly coverage, if the employer allows. At this time, there is no special election period for people who did not sign up for Cal-COBRA when they first became eligible.